Farmers ‘big winners’ of Peru trade deal breakthrough

Farmers “big winners” of Peru trade deal breakthrough

Federal Trade Minister Steve Ciobo.

Federal Trade Minister Steve Ciobo.


Australian farmers have welcomed the ushering in of a new Free Trade Agreement (FTA) for access to expanding agricultural opportunities in Peru.


AUSTRALIAN farmers have welcomed the ushering in of a new Free Trade Agreement (FTA) with access to expanding agricultural opportunities in Peru.

In May this, year, Federal Trade Minister Steve Ciobo revealed negotiations were underway on the potential trade deal at a meeting in Canberra with Peru’s Foreign Trade and Tourism Minister Eduardo Ferreyros.

The first round of negotiations was held in Lima and talks ongoing throughout the year with conclusion reached on an agreement, announced at the Asia-Pacific Economic Cooperation (APEC) summit in Vietnam, by Prime Minister Malcolm Turnbull.

Both countries will now present the trade agreement for formal ratification via their own domestic treaty making processes, before it can enter into force.

In Australia, the process will include a Joint Standing Committee on Treaties (JSCOT) inquiry and the consideration by the parliament of any changes to legislation and regulations needed, to implement the agreement.

Mr Ciobo said businesses, farmers and families were the “big winners” of the new PAFTA deal.

“The equation is simple: more trade means more exports; more exports means more jobs, higher wages and better incomes.

“PAFTA delivers huge wins for Australian businesses with market access outcomes that go well beyond the Trans-Pacific Partnership (TPP) Agreement.

“Australian farmers, effectively shut out of the market until now, will have the opportunity to compete on a level playing field.

“PAFTA will eliminate 99 per cent of tariffs that Australian exporters face into Peru.

“Sugar, dairy, rice and sorghum farmers will enjoy historic market access opportunities.”

Mr Ciobo said Australia’s sugar market access was “more than any other sugar exporting country” had achieved in the last 20 years and equivalent to roughly 30 per cent of Peru’s sugar imports.

“Peruvian supermarkets are already asking about getting Aussie beef on their shelves - this agreement will help that happen sooner,” he said.

“There will be immediate duty free access for Australian sheep meat, most wine and most horticulture products (including almonds), kangaroo meat and wheat.

“Australia has secured the best services commitments Peru has ever offered.

Mr Turnbull – the acting Agriculture and Water Resources Minister in Barnaby Joyce’s absence while he fights a by-election in New England – said the PAFTA deal would generate economic growth and Australian jobs for decades to come.

“Our businesses, farmers and families are the big winners,” he said.

Peru is one of the fastest growing economies in the world with an average growth rate of 5.9 per cent over the last decade.

National Farmers’ Federation President Fiona Simson said Fiona Simson PAFTA was a great opportunity for Australian food and fibre producers.

“We congratulate Minister Ciobo and the government for their efforts in seeing the agreement to fruition,” she said.

“Until now, Australia has been unable to effectively compete for Peruvian market share because of the favourable tariff terms enjoyed by the United States, Canada and the European Union - PAFTA will level the playing field.

“The Agreement opens new markets for Australian food and fibre exports - there will be opportunities from day one for sugar, dairy, rice, sorghum, sheep meat, seafood and wine.”

Ms Simson said as an export-dependent industry, Australian agriculture’s growth depended on continually improving market access for our produce.

“In 2016-2017 the farm sector was valued at a record $60 billion - this growth has been spurred on by the government’s commitment to negotiating valuable FTAs including China, Japan, Korea and now Peru.

“Exploring further trade opportunities, like PAFTA, will go a long way to seeing our industry continue to grow and reach a production value target of $100 billion by 2030.

“The preferential trade of our food, fibre and forestry products is not only good for farmers but the national economy as a whole.

“Agriculture powers 1.6 million jobs across the farm sector supply chain. Increased farm, food and fibre exports undoubtedly lead to more Australian jobs.”

Australian Meat Industry Council Chair Lachie Hart also welcomed the trade deal saying that, as an exporting red meat nation, “we are always working towards opportunities for freer trade and this is an example of that”.

Australian Dairy Industry Council Chair Terry Richardson said the PAFTA was “a fantastic outcome” for Australian dairy farmers and the industry in general.

“Historically, Peru has been a sensitive market for dairy imports, so this is a significant achievement,” he said.

“The Australian dairy industry is recognised worldwide for producing sustainable, premium quality products and we’re excited that this new deal will provide access to a growing market.”

CANEGROWERS Chair Paul Schembri said the inclusion of sugar in the deal with Peru sent a clear message that sensitive commodities, which have been excluded from some past Australian trade agreements, can and should be included.

He said 80pc of the raw sugar produced from cane was exported so “every market door that is opened is welcome as it increases the demand for Australian sugar”.

“The new access for Australian raw sugar to Peru is 30,000 tonnes per year from the first year of the agreement, increasing to 60,000 tonnes in year six and 90,000 tonnes in year 18,” he said.

“While the initial amounts of raw sugar Peru may purchase are small compared to our annual production of more than 4.5 million tonnes, the FTA will enable Australian exporters to establish and grow commercial relationships with refiners in Peru which has one of Latin America’s fastest growing economies.”

A joint statement from Meat and Livestock Australia, Sheepmeat Council of Australia said the liberalisation of the Peruvian import regime achieved in the Peru-Australia FTA provided an “exciting opportunity” for the Australian red meat and livestock industry to access a new export market.

“With Peru forecast to triple its beef consumption by 2020 and its sheepmeat consumption by 20pc by 2025, our industry will be in a position - pending finalisation of certification arrangements - to respond to potential inquiries from Peru’s retail and foodservice sectors and offer Peruvian consumers an alternative supply source,” the statement said.

“Importantly, PAFTA will provide a useful stepping stone to securing closer economic relations with the Pacific Alliance group of countries - Chile, Columbia, Mexico and Peru - and thereby help expand industry’s engagement in Latin America.”

Key PAFTA outcomes for agriculture

  • In 2016 Peru imported US$4.6 billion of agricultural goods, however Australia only exported $5.3 million worth of agricultural goods to Peru because of tariff barriers and preferential access for our competitors.
  • Australia will have duty free access for 30,000 tonnes of sugar into Peru, growing to 60,000 tonnes in five years and 90,000 tonnes in 18 years – more than any other sugar exporting country has achieved in the last 20 years.
  • Tariffs of up to 17pc will be eliminated within five years on beef
  • Australia will have duty free access of 7000 tonnes of dairy products into Peru, growing to 10,000 tonnes in five years.
  • Tariffs on all sheep meat up to 9pc will be eliminated on entry into force of the agreement.
  • Peru will eliminate all tariffs up to 9pc for seafood, almonds, wine, wheat and sheep-meat on entry into force.

The story Farmers ‘big winners’ of Peru trade deal breakthrough first appeared on Farm Online.


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